Tony Abbott has told his colleagues that there would be more economic shocks to come in the wake of Toyota's decision to pull out of Australia.

The warning came as the manufacturing sector reeled from the news amid fears that related high-technology manufacturing might also face extinction.

"I fully share the dismay of members opposite, of members on all sides of this house": Tony Abbott. Photo: Andrew Meares

Mr Abbott told Parliament he was as devastated as anyone by the car company's planned departure.

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''I fully share the dismay of members opposite, of members on all sides of this house, at the announcement that Toyota made yesterday,'' he said. ''Every single one of us, every single one of us, is devastated by this announcement, just as we were devastated by the announcement in December that Holden would cease manufacturing.''

Earlier in the day, he warned his MPs that economic adjustment was never easy. ''There have been economic shocks and there will be more to come,'' he told the Coalition party room, a spokesman said.

''We feel the concern for people in painful economic circumstances but our concern shouldn't allow us to depart from the truth that only profitable businesses create jobs.''

But with pressure intensifying from the opposition to explain what was done to convince Toyota to stay, Mr Abbott counselled against the folly of governments ''chasing businesses down the street with a blank cheque''.

The issue dominated the first parliamentary question time for the year, with the opposition accusing the government of callous indifference to workers in the automotive sector.

Mr Abbott said Toyota would have cut production costs but had been frustrated. ''I very much regret the fact that when Toyota just a few months ago sought to talk to their workers about improving productivity in their factory, they were denied because of the operation of our system that opportunity,'' he told Parliament.

The comments were a reference to the refusal by automotive sector unions to allow the company to vary enterprise bargaining agreement provisions as it moved to cut costs in its Australian operation.

Toyota confirmed on Tuesday that it would continue with a challenge to the recent Federal Court decision disallowing any changes to its EBA outside of the specified variation conditions. The government, through Workplace Relations Minister Eric Abetz, also confirmed that it would persist in backing the Toyota challenge.

In Parliament, Mr Shorten accused him of blaming automotive workers on $50,000 a year for the company's withdrawal.

The opposition stepped up its claim on Tuesday that Toyota had been planning to build two new models in Australia from 2017 and that those plans were being developed as recently as the second half of 2013, but the withdrawal of Holden prompted a rethink at the makers' Japanese headquarters.

Former industry and innovation minister Kim Carr has revealed he was in active discussions with Toyota management during the final days of the Labor government about the future of the industry. He was confident the cars would have been built here subject to suitable financial assistance. One of them was a new generation Camry.

The claim appears to be supported by a Toyota submission made to the government's Productivity Commission inquiry into the automotive industry in December. In its submission, the car maker listed as its key request an auto industry policy described as ''a long-term, consistent, globally competitive policy suitable for the Australian context to attract future investment''.

Mr Abbott's office confirmed on Tuesday that the Prime Minister had received no advance notice of the Toyota decision.

The company's global head Akio Toyoda, its Australian chief Max Yasuda, and three other executives flew to Canberra on Monday night for a 9pm meeting with Industry Minister Ian Macfarlane.

Mr Abbott also attended for a brief period. However, it was made clear that the company's mind was made up and it decision to leave was irreversible.

248 comments

the next to go will be QUANTAS they are asking the government for more money the question is will they get it ???

Commenter

beachball

Location

castle hill

Date and time

February 12, 2014, 6:54AM

NO! Please don't give away any of my tax payer's money to Qantas. If it's not able to cut it in the big bad world on their own, no need to sink funds into it.Joyce is able to shut down the airline because of union nuisance and lose $70M at a whim. ...now he's coming cap in hand?Might as well become a communist country full of state-owned enterprises. We'll be producing stuff no one wants, but there will be no unemployment.

Commenter

Julie

Location

Port Melbourne

Date and time

February 12, 2014, 7:20AM

a first world country that can't make a car, can't make a fridge or washing machine, can't can food. there's not going to me be much left to do, so what are all these new technologies and new jobs that will supply high demand for labour that the LNP tell us of?

Commenter

Martin

Date and time

February 12, 2014, 7:20AM

"in difficult times, stupid things happen" - LNP government policy.

Commenter

Tin

Date and time

February 12, 2014, 7:21AM

Get your facts and spelling in order before commenting* QANTAS is not hard to spell. * QANTAS a not asking for money. Follow the facts !

Commenter

Pistol Pete

Date and time

February 12, 2014, 7:54AM

"every single one of us, is devastated by this announcement"You make me laugh Abbott

Commenter

Really

Date and time

February 12, 2014, 8:04AM

@Pistol Pete. You would be wise to get your grammar in order before accusing someone of spelling a business name incorrectly. Makes you look somewhat foolish!

Commenter

Skuze Me

Date and time

February 12, 2014, 8:05AM

The Productivity Commission’s position paper on automotive manufacturing has a comparison of assistance rates across countries.When all types of assistance are taken into account, it turns out that Australia has subsidised the manufacturing of vehicles to quite a large extent -- $US1885 per vehicle.This is compared with other countries - such as Sweden ($US297), Germany ($US206) and the US ($US166). Australia has the highest rate of budgetary assistance of the seven first-world countries listed.The Australian federal and state governments have spent a lot of money in trying to convince the foreign multinational companies to continue to produce cars here. Toyota Australia has received nearly $500 million in the past four years; now, there are around 2500 Toyota employees - that means $50,000 a worker a year.The question is - was there ever going to be a 'realistic' (reasonable and acceptable to the taxpayers) amount of taxpayer money that could have kept Toyota in Australia?

Commenter

Howe Synnott

Location

Sydney

Date and time

February 12, 2014, 8:10AM

Martin - I agree, We have a government that is poisoning the economic environment.

To replace manufacturing and aviation, we might do better if we had a government prepared to:

a. Provide the appropriate infrastructure - like a very fast broadbandb. Hold back on its austerity policiesc. Stop discouraging science and innovation - ie - get a science minister.

At the moment, the artless adults are in charge and the Minister for Vendettas is their leader.

Commenter

Ross

Location

MALLABULA

Date and time

February 12, 2014, 8:11AM

The renewable energy sector would offer such a new market... Ah darn, I forgot, we''really putting all our money on coal and clen energy is absolute crap...

12 Feb
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12 Feb
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12 Feb
The exodus of Australia's last three car makers will be a nasty economic blow to the vehicle manufacturing hubs of Melbourne and Adelaide. But the consequences for NSW, and other states, are likely to be much less significant.